Sunday, June 8, 2014

Role of CEOs in Knowing What’s Happening in the Association

Is it me? Doesn’t it seem that more and more CEOs (chairmen, presidents, etc.) are claiming they did not know about the “bad” stuff happening inside their organizations?

Four Examples of CEO's In the Dark

In announcing results of an internal investigation, General Motors CEO Mary Barra said top executives were not aware of the faulty switch until much later and then fired 15 employees for misconduct. “Essentially, the report says that there wasn't a conspiracy, that it was just a culture of incompetence and misconduct, where people who were supposed to report sort of didn't - and also that there were some structural problems within the company that kept recalls and the decisions from going to the highest levels.”

Veterans Affairs Secretary Eric Shinseki resigned over hospital scandals of which he said he was not aware. The Huffington Post wrote Eric Shinseki, The Man Who Trusted Too Much

“In Ric Shinseki's army, no one got punished for telling the truth. And commanders could rely absolutely on their subordinates' word. Now, with the facts about systemic dishonesty, cheating and dysfunction within the VA exploding out into public, it seems clear that within the largely civilian Department of Veterans Affairs, telling the truth was not just frowned upon -- it was punished by mid-level managers. Precisely why middle managers were reluctant to report to Washington that they were unable to meet the 14-day performance standard and other requirements will be determined by the IG's continuing investigation. But one reason may have been a simple unwillingness to rock the boat. According to the VA's 2014-2020 Strategic Plan, its workforce, swollen with mid-level managers and administrators, is rapidly aging. A third of its 332,000 employees are eligible for retirement, including roughly 50 percent of the department's senior executives.”

A Harvard study showed that one of the reasons for the demise of Kodak resulted from concerns and possible solutions from engineers didn’t make it to top management. Steve Sasson, the Kodak engineer who invented the first digital camera in 1975, characterized the initial corporate response to his invention this way: “But it was filmless photography, so management’s reaction was, ‘that’s cute—but don’t tell anyone about it.”

Even President Barack Obama has a habit of saying “I learned about that in media reports.”

What does this mean to associations?

While I’ve worked in some large associations, they did not have the huge staffs of the organizations involved in these cases.

Yet, I worry about a growing culture in which the CEO doesn’t seem to be aware of what is happening in his/her organization.

What is the culture of your association/nonprofit?

Have you established systems to ensure that news (both good and bad) get to the CEO and other top association executives?

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